Operator News
US – Borgata and Ocean settle out of court following poaching and stolen data allegations
By Phil - 9 May 2021
MGM Resorts has confirmed that its Borgata property has withdrawn its lawsuit against Ocean Casino, which accused Ocean of illegally poaching Borgata staff in an attempt to learn confidential information about its high-roller customers.
A spokesman for MGM Resorts International said: “The matter between Borgata and Ocean Casino has been amicably resolved. As part of the resolution, Ocean has agreed to honor Borgata’s restrictive covenants, including its non-compete, non-solicitation, and confidentiality provisions that are designed to protect Borgata’s trade secrets.”
The case hinged on Ocean poaching around a dozen executive members of staff from Borgata last year. Borgata is the top-earning casino in Atlantic City with Ocean in third place with roughly half of Borgata’s revenues.
US District Court Judge Noel Hillman said the amended filing ‘removes certain claims against the individual employees and focuses its aim more directly on the actions of Ocean.’
“A central aspect of Borgata’s business success is its relationship with its most important customers, which it refers to as ‘high-level patrons,’ who are responsible for approximately $25 million in revenue per year,” Mr. Hillman said. “Borgata leverages its information about each of these patrons to maintain their valuable relationships with the casino and the revenue stream they provide.”
While terms of the settlement were not disclosed in the filing, Borgata has been winning the legal steps along the way.
One executive Kelly Ashman Burke, who was the former Executive Director of marketing at Borgata, has been told she can not start work for Ocean until her 11 month non-compete clause expired. Another, William Callahan, formerly Borgata’s Vice President of marketing was found to have copied client details from his Borgata work phone to a new phone when he left his position at Borgata departure,.
Borgata said in its first filing: “Ocean is indisputably Borgata’s direct and primary competitor for high-level casino customers in Atlantic City.”
Ocean countered: “While Ocean argues that it benignly hired ’employees from another Atlantic City casino’ who wanted to leave, that assertion, even if true, ignores that a ‘benign, or pro-competitive, motive does not absolve misconduct’ and ‘a defendant-competitor’ must justify not only its motive and purpose but also the means used. More critically, Ocean ignores that [the Borgata] alleges improper motives and means, namely that Ocean discussed with key Borgata executives ‘potential methods to circumvent the restrictive covenants contained in their employment agreements’ while they were still Borgata employees.“
